July 31, 2012

Analyst Insight by Svetlana Uduslivaia – Senior Research Analyst at Euromonitor International

Globally, retail sales of pet dietary supplements are worth over US$1.1 billion, with the North American pet care market accounting for close to 60% of total global value sales. Reflecting a growing trend in their own personal diets, many pet owners, especially in developed markets with a strong presence of natural health products for humans, are seeking to incorporate vitamins and minerals into their pets' diets to prevent nutritional deficiencies and support and maintain their health.

In Canada alone, retail sales of pet dietary supplements are expected to be worth an estimated C$256 million by the end of 2012, increasing by more than 2% in current value terms on the previous year. Supplements for joint, cardiovascular and digestive health are particularly popular among pet owners. However, overall growth has been somewhat limited as supplements in pill format are not convenient for owners to give to their pets. Additionally, much of the potential for supplements is caught up in functional/fortified food and treats and some animal experts simply recommend a good diet for pets. Additionally, many industry experts indicate that the efficacy of pet supplements has not been proven through adequate research, thus creating an obstacle to stronger category growth.

Current regulatory environment

Research shows that there is a degree of confusion and misconception over current regulations with regard to pet dietary supplements in Canada. Some industry participants believe that these products are not regulated at all in Canada, which, however, is not an accurate view of the current situation.

Veterinary natural health products (vNHPs) in Canada fall under the Food and Drug Regulations and are classified as New Drugs. Subsequently, the products are subject to Division 8 requirements of the Food and Drug Regulations. A new drug submission, supported by safety, efficacy and quality data, must be filed for evaluation by Health Canada for a product to be allowed for sale in Canada. If approved, the products are given a drug identification number (DIN).

Some vNHPs could be classified as Not New Drugs if a similar product has been approved for sale in Canada for a significant period of time.

In early 2012, a pilot programme was introduced as a way to streamline the approval process and subsequently ease the way for products onto Canadian store shelves. The new Notification Program for Low-Risk Veterinary Health Products is administered by North American Compendiums (NAC). The programme has been developed in collaboration with Health Canada and the Canadian Animal Health Institute. The programme operates on a voluntary basis and applies to products like homeopathic preparations, botanicals, vitamins and minerals for dogs, cats and horses.

As of March 2012, NAC started issuing notification numbers to applicants that qualify under the programme. Those applying for a notification number must attest that they meet certain ingredient requirements, have adequate safety data to support their product and the manufacturing process is in compliance with GMPs (the Good Manufacturing Practices). Once North American Compendiums has approved the application and has issued a notification number, Health Canada permits the applicant to sell the product.

The new notification programme only applies to products that are formulated with ingredients on the List of Admissible Substances developed by Health Canada. Furthermore, only general health benefit claims are allowed, while therapeutic or treatment claims are not permitted on labels or in advertising. The new programme also excludes certain routes of administration, namely ophthalmic, inhalation and injectable.

A DIN will still be required eventually. However, with the new pilot programme in place, Health Canada will not take action against products that are in compliance with the pilot programme and are found in stores without a DIN.

Despite certain limitations, the new pilot programme allows manufacturers of pet dietary supplements to get to the market faster, within a few weeks, as opposed to significant expenses and a long wait while applying under the drug regulations.

NAC has already issued a number of notifications. The list of approved brands and products includes, for instance, Jamieson Natural Sources PetCare Digestive Health, Jamieson Natural Sources PetCare Joint Health and Jamieson Natural Sources PetCare Multivitamins. PetCare is a new line of pet care supplements from Jamieson Laboratories, a leading manufacturer and marketer of natural health products for humans in Canada. Other approved products include glucosamine supplements marketed by Veterinary Healthcare Solutions, omega supplements from Nor Vet Sales Inc and a range of joint supplements from Nutri-Vet.

Clarifying and streamlining the process for market approval might lead to stronger growth for pet dietary supplements in Canada as more products could make their way onto store shelves under the notification programme. Wider retail distribution might also be a result of the programme, with more products potentially appearing in mass-market retailers like grocery stores and mass merchandisers in addition to more common retail distribution channels such as veterinary clinics and pet stores.

However, threats to stronger growth and wider pet owner acceptance still include the issue of efficacy. Just as with human natural health products, pet owners will also be asking questions as to whether pet supplements are indeed effective and do what they claim to do. Additionally, ongoing development of fortified/functional pet foods and treats with ingredients like omega-3 and glucosamine will also create a challenging competitive environment for dietary supplements.